Commercial Payments Bill Reaches Report Stage in House of Lords

Wednesday 16th September, 2026

The Commercial Payments Bill has reached Report Stage in the House of Lords where members concluded their further examination of the Bill. 

The Commercial Payments Bill will strengthen existing laws and introduce new measures to combat late commercial payments in the UK. Key provisions include maximum 60 day payment terms, mandatory interest on late payments, banning retention clauses in the construction sector and expanding the Small Business Commissioner’s powers to resolve payment disputes.

Report stage is an extra chance for members to closely scrutinise elements of the bill and make changes.

Members speaking at report stage considered changes to the bill on subjects including: 

• Requiring intermediaries to remit payments collected on a supplier's behalf within 7 days
• Maximum payment period for private purchasers
• Creating a standardised definition of different sized businesses
• Payment disputes referred to the adjudication scheme
• Financial penalties for breach of payment reporting

Core Provisions of the Bill include:

• Imposing a statutory cap of 60 days on standard business-to-business payment terms (30 days for public authorities).
• Enforcing mandatory late payment interest at 8% above the Bank of England base rate,
  voiding any contractual attempts to exclude it.
• Expanding the Commissioner's powers to investigate payment practices, adjudicate disputes outside of court,
  and enforce statutory reporting duties.
• Requiring large companies with poor payment records to publish board-level commentary
  explaining their performance and remedial steps.
• Banning retention clauses and withholding practices in construction contracts.

Next steps: A third reading, a final chance to examine the bill and make changes is scheduled for Tuesday 20 October.

Related News: Commercial Payments Bill Enters Lords Committee Stage